The delicate insurance regulatory environment in Florida could make premium increases a political hot potato. (Christos Georghiou/Adobe Stock)
Despite insurance market improvements in Florida in the wake of successful legislative efforts focused on curbing costly coverage lawsuits, the roughly 850,000 policyholders served by Citizens Property Insurance Corp., the state’s carrier of last resort, can expect rate increases from 1% to 6.6% or more, according to WWSB, the ABC affiliate in Sarasota.
This increase, however, is markedly less than the 13% for which Citizens requested approval from the Florida Office of Insurance Regulation in 2024.
“The highest rate increases will most likely be felt by those along Florida’s Gulf Coast who experienced a relentless hurricane season last year,“ Triple I Director of Corporate Communications Mark Friedlander told WWSB. He added that although the Sunshine State is frequently battered by costly hurricanes, the real challenge to insurance costs in Florida has been "manmade losses — an excessive level of legal system abuse."
With jury awards and lawsuit settlements becoming exorbitant, expenses from lawsuits (or the tort system) in the U.S. added up to $529 billion in 2022, or more than 2% of the U.S. GDP and $4,207 per American household, according to the U.S. Chamber of Commerce Institute for Legal Reform.
Now, insurance business leaders speak less about “social inflation,” a phenomenon in which large corporations are expected to be held accountable for correcting societal wrongs, and instead beat the drum of “legal system abuse,” or excessive litigation that’s driving up insurance costs.
Related: Does every insurance lawsuit constitute legal system abuse?
Coverage litigation has been especially impactful in the auto insurance market, where “overzealous billboard attorneys are exasperating the situation, as insurers last year on average paid out more than $1.10 for every $1 in premium they collected,” according to the Triple I.
Tort reform is viewed by the insurance industry as a possible solution to legal system abuse. Such state legislation enacted in Florida in 2023 reduced the statute of limitations for negligence claims, capped the amount of damages plaintiffs can recover, and made it more difficult to pursue bad faith lawsuits.
State leaders say it’s working.
“Florida’s insurance industry is improving,” Florida Insurance Commissioner Mike Yaworsky said in a January 2025 statement. “From our market conduct units securing millions in restitution for Floridians to our team being national leaders in identifying positive market trends, I am proud of the hard work our office has done this past year. In addition to regulating one of the most complex insurance markets in the world, our office strives to promote a stable marketplace while protecting Florida’s consumers. Going into the New Year, we are pleased to report that the marketplace continues to strengthen.”
Tort reform critics argue such steps hinder the wheels of justice.
“Tort reform has had devastating consequences for countless innocent children and families,” says a Fall 2024 article published in the Florida Bar Journal. “It has also weakened the ability of the civil justice system to protect vulnerable patients from injury.
However, Yaworsky said the state’s property insurance market has shown resilience and growth:
- More than 7.55 million residential insurance policies are in force.
- The average monthly request for homeowners’ rates is 1.2%, compared to 14% just a few years ago.
- Nine new property and casualty insurers have entered Florida’s market since historic legislative reforms.
- Among the top ten national carriers in Florida, 60% have expanded their book of business and 40% have filed rate decreases.
The Commissioner added that reinsurance costs significantly decreased from 2022 to 2024, and the insurance carrier ratings in the state have generally improved.
But the situation may be fragile, according to the Triple I. New bills have been introduced in Florida that would curtail previous tort reform measures.
“These measures aim to dismantle critical components of Florida’s recent landmark lawsuit abuse reform wins, weaken the state’s improving lawsuit abuse climate, drive up litigation costs and ultimately increase the cost of living and doing business for Floridians,” the Florida Chamber of Commerce wrote in a recent mailing.
The developments combined create a delicate insurance environment in Florida in which premium increases could become a political hot potato.
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